Politics, War, People, Poverty, Human Rights, Pollution

It starts a bit slow but be patient you will find a lot of answers you never thought of before.

It is an older video but definite worth watching.

Do take the time. You may learn a thing or two.

Economist, author, Professor emeritus UMass, Amherst, Richard Wolff, speaks about the current economic crises, its’ roots and what we can do about it.
Filmed by Paul Hubbard at Brown University, Providence RI on 12-2-9
This problem is hitting countries, around the world also.

And then along comes one of those stories that makes you cringe down to your very core, that makes you see our semi-fine nation and the world around it through a bleak and unforgiving lens indeed. No matter how hard you try and how you spin the story and flip it around and try to forcibly shape it into something less slightly nauseating, all you can do is realize that sometimes ugliness and violence win the day, the year, the planet.

So it is that a new report has just emerged, announcing with a sort of drab and bitter capitalistic glee that America is once again the number one weapons dealer in the world. It’s true: We sell more guns, more major weaponry, tanks and rocket launchers, fighters and Gatling guns and all sorts of brutal devices specifically designed to destroy human life and induce fear and dread and all manner of sadistic horror, than any other developed nation on the planet. By a long shot.

But that’s not all. Despite the bleak economy, despite what you might expect to be a major downturn in such transactions, sales of American-made guns and weapons of mass annihilation worldwide are actually way up. As far as U.S.-made weapons are concerned, it appears to be a boom time for war and death and conflict. Isn’t that fun to swallow with your hopes and dreams for a peaceful and calmly evolving future?

So far ahead in weapons sales to the world are we, it’s not even a contest. We own the game. According to the nonpartisan Congressional Research Service, while overall weapons sales were indeed down due to global economic blight, sales of U.S. weaponry rose more than 50 percent in a single year, totaling about $37 billion, up from $25 billion the year before.

Translation: the U.S. now owns a whopping 68 percent of the arms games worldwide. We’re just like Wal-Mart, if Wal-Mart sold Browning M2s and Stingers and flamethrowers. Isn’t that reassuring?

Sure, you can water it down a bit, maybe propose to your exhausted soul that we only sell said weapons to our friendly, peace-seeking allies so they may protect themselves from various evildoers and swarthy terrorists whom we also detest and wish death and hate upon, or you could tell yourself that most of said weaponry is really for defense and for shielding babies and puppies and virgins from the darker nature of man.

You can even go so far as to suggest that our arms deals are not promoting war, per se, but actually promoting peace, in that inverse, bad-is-good, multiple-wrongs-make-a-right sort of way. It’s the classic, ridiculous NRA argument: if everyone owns a few thousand warheads, no one will shoot anyone simply because they don’t want to get shot themselves. It’s pathetic nonsense, but hey, whatever gets you through, right?

Sad fact is, capitalism trumps all rational arguments, all notions that we are out only to promote good in the world, and we will sell weapons to just about anyone anywhere short of Al Qaeda itself. Guerrillas? Dictators? Drug lords? If they somehow serve our global agenda, hell yes. We sell billions in arms to our pals in the UAE and Saudi Arabia, for example, regimes second only in oppression and totalitarianism to the Taliban. We buy their oil, we turn around and sell them fighter jets and grenades and sniper rifles. It’s a win-win, where everybody loses.

Of course, it’s all nothing new. America has always been the world’s foremost arms dealer. Who can forget one of the classic hypocrisies of all time, Bush’s pathetic wail that we must stop the development of weapons of mass destruction in countries we do not like, when of course the United States owns more WMD than any developed nation on the planet? We argue it’s all about intent, all about protecting our vital interests. Which may be partly true. The other truth is, it’s also all about profit, ethics and morals bedamned.

I can’t help but recall that cute little scene in Iron Man, when Robert Downey Jr.’s Tony Stark character, a cocky, heartless arms dealer, finally realizes the horrible human consequences of his trade, what sort of mayhem and death he has helped promote, and decides to turn his life around and fight for justice and help save the world.

Isn’t that a charming little cartoon fable? Isn’t that just ridiculous, ultraviolent fantasy? Don’t we nevertheless love to rub such childish ideological balm all over ourselves and think that’s really what America is all about, that selling death to oppressive regimes is merely a necessary evil and, gosh golly, if we could, we’d put a stop to all such sales tomorrow in favor of ensuring a peaceful and utopian future? Sure we do. In many ways, such a mass delusion is the only way we can really get out of bed in the morning.

I’m not exactly certain how you counterbalance such bleak data. I’m not sure where to look for an equally powerful story to battle the dour fact that we are, at heart, a rather ruthless capitalist military juggernaut that will gladly sell a sharpening stone to an axe murderer if it serves our purposes and makes Lockheed Martin a tidy profit.

Where do you look for proof that $37 billion in weapons sales does not, in fact, exert a simply massive downward thrust on the desire to imagine humanity is moving in an ultimately positive, hopeful, nonviolent direction? The green movement? Solar power? Hybrid cars? As if.

Maybe you don’t look at all. Maybe there is no such story, no way to offset the fact that war and violence are a major engine of capitalism, and always will be. Maybe you only swallow it whole, hope it doesn’t tear a permanent gash in your spirit, and eagerly await Iron Man 2.

A city council finance chief has admitted people have questioned their own roles in the Icelandic bank saga which has seen £42m of council cash frozen overseas.

John Beevers, head of financial projects at Nottingham City Council, said lessons are being learned about credit ratings after the authority ploughed vast sums of money into Landsbanki, Glitnir and Heritable just months before they ran into trouble.

Mr Beevers told the council’s Overview and Scrutiny Committee: “It [the Icelandic banks crisis] has provided more focus around the impact of credit ratings and what they show and whether they have been sufficient.

“There is a number of people that, as things come out, are looking at whether their role in it has been appropriate.

“I think we are taking on board the lessons we are learning.”

He also said there had been changes in some of the banks’ credit ratings around the time the investments were made.

“There had been some negative rating outlook changes on some of the banks,” he told the meeting. “That has not developed through to a complete meltdown of the bank itself.”

He later added: “Our actions are reinforced by over 100 other institutions. If the message were so loud and clear we would have been a number of two or three.”

The meeting heard the council was continuing to use the same credit rating agency, Butlers.

Deputy chief executive Carole Mills-Evans said an update on recovering the money was expected in the next “couple of weeks”.

She claimed that it would have been “almost impossible” for the council to get its money back before the end of its agreement with the banks.

“There is some talk that some councils have exit clauses. We have yet to find one council that that applies to.”

“Not all conversations concerning this matter have been made public . . . When the matter is investigated, other conversations will have to be made public. I am aware of what they are about and I am aware of what in fact determined the position of the UK authorities,” the Financial Times quotes Icelandic central bank chairman David Oddsson as saying.

The implication, the article continues, is that the UK was right to use anti terror laws to freeze Icelandic assets at the beginning of the banking crisis in October. Furthermore, the FT states that any such revelations could damage any potential lawsuit filed against the British government by Reykjavik. The Icelandic government has hired Lovells, a UK law firm to investigate whether London acted illegally and significantly and unnecessarily worsened the economic crisis already unfolding.

Oddsson’s comments were made during a speech to the Iceland Chamber of Commerce late last week. As a former long-standing Prime Minister, current head of the central bank and prominent Independence Party figure, Oddsson is seen as a close ally of PM Geir Haarde, who once served as his minister of finance.

Oddsson and Haarde, among others, are credited with liberalising the Icelandic financial sector and also blamed by many for allowing the current crisis to unfold. As many as 90 percent of people now want Oddsson replaced, and a Frettabladid poll this weekend revealed that 70 percent of respondents no longer support the current government.

David Oddsson protests his innocence however; stating in his speech that he had been warning the government on the state of the banks for 18 months and was repeatedly ignored.

He also described the inquiry recently announced by the government as “a whitewash”.

“The investigation . . . is in all respects unsuitable and insufficient. It is almost laughable to see the posturing in the entire organised propaganda campaign which has been carried out by those who bear the prime responsibility,” he said.

Iceland followed the prescriptions of a right-wing ideologue, and its economy paid a severe price.

November 17, 2008

by Toby Sanger for Alternet

Iceland — better known for its geothermal hot springs, abundant fish, all-night raves and eclectic musicians such as Björk and Sigur Rós — has now become renowned for something else: It is the first catastrophic, and perhaps most unlikely, casualty of the 2008 economic and financial meltdown.

Corporate taxes were cut from 50 percent down to 18 percent. Privatization and deregulation were driven directly through the prime minister’s office, and the major banks were privatized.

Iceland is now essentially bankrupt after the government took over its three major banks to prevent them from failing. It owes more than $60 billion overseas, about six times the value of its annual economic output. As a professor at London School of Economics said, “No Western country in peacetime has crashed so quickly and so badly.”

What on earth happened to get Iceland and its banking sector into such a state?

It turns out that Iceland, despite its coalition governments and Nordic social values, became a poster child for neoconservative economic policies inspired by Milton Friedman during the past decade. Friedman himself visited Iceland in 1984 and participated in what was described as a “lively television debate” with leading Socialists. This inspired a generation of young conservatives who came to power through the Independence Party in 1991 and have run its government through different coalitions since then.

Friedman may be dead now, but the economic and financial collapse of 2008 is becoming a real-life battleground of his theories against those of the other giant of 20th century economics, John Maynard Keynes, and their respective followers. Will financial market bailouts put the economy back on track, or are more extensive reform and a more active role for the government needed?

Keynes’ analysis was complicated and nuanced. The work for which he’s best known, The General Theory of Employment, Interest, and Money, provided a theoretical basis for the economic reforms of the New Deal era — investments in public works and deficit spending that helped countries recover from the Great Depression.

While Keynes did not dismiss the role of monetary policy in countering an economic downturn, some of his followers, notably recent 2008 Nobel economics prize winner Paul Krugman, in relation to Japan, have focused on the possibility of a “liquidity trap” that makes traditional monetary policies, such as cutting interest rates, ineffective.

Keynes’ theories, though often misapplied, provided the basis for most macroeconomic policies in the capitalist world from the 1930s until the 1970s when the oil-price shock and stagflation hit.

Friedman, in his Monetary History of the United States, argued that the Great Depression was primarily caused by negligence by monetary authorities, such as the US Federal Reserve, who didn’t do enough to respond to an ordinary financial shock by expanding the money supply.

Friedman and his Chicago school of economics then very successfully spearheaded a reaction against Keynesianism, largely defining economic policy since the 1980s. The main policy prescriptions — restricting the role of government, deregulation, privatization, cutting taxes, low inflation and the benefits of free markets — were encapsulated in the “Washington consensus” and imposed with missionary zeal by IMF economists around the world.

While Friedman’s narrow form of money supply monetarism was quickly abandoned in the early 1980s, most governments have relied primarily on monetary instead of fiscal policy for stabilization of their economies over the past few decades. This turned Alan Greenspan, former head of the US Federal Reserve and an advocate of Friedman’s policies, into the most important economic policy maker in the world.

Although Greenspan was never elected, had no particular expertise in economics and was a disciple of the fringe ideology of libertarian Ayn Rand, he was able to use his considerable power to endorse tax cuts and deregulation. He is now widely considered to share the blame for creating the conditions that resulted in the current economic collapse.

Greenspan’s successor as chair of the Federal Reserve, Ben Bernanke, is also a follower of Friedman, but he is an accomplished economist. Coincidentally enough, one of his areas of expertise was in the economics of the Great Depression; he once boldly stated that the Federal Reserve was responsible for causing the Great Depression and making banking panics during it “much more severe and widespread.”

Bernanke is now one of the people in charge of what is probably the most expensive experiment in human history: trying to avert another Depression, using economic policies inspired by Friedman. The cost of this to the US Treasury so far has already reached well over $1 trillion and continues to rise.

So how did the much smaller but perhaps more ambitious experiment with Friedmanite economic policies fare in tiny Iceland, one of the most physically isolated countries in the world with a population of only 320,000?

Under the leadership of Prime Minister David Oddsson and explicitly inspired by Friedman, Iceland’s neoconservative young Turks implemented a radical (but now familiar) program of privatization, tax cuts, reductions in spending and deficits, inflation targeting, central bank independence, free trade and exchange rate flexibility. Corporate taxes were cut from 50 percent down to 18 percent. Privatization and deregulation were driven directly through the prime minister’s office, and the major banks were privatized.

Economic missions and reports on Iceland issued by the influential International Monetary Fund (IMF) and the Organization for Economic Co-operation and Development (OECD) largely praised and encouraged these reforms, often disregarding the rising risks for its financial sector until recently.

It wasn’t as if everyone was unaware of the growing dangers of these policies. In 2001, Joseph Stiglitz, recipient of the Nobel prize in economics and one of the leading lights of the “New Keynesian” school of economics, wrote a remarkably prescient paper for the Central Bank of Iceland. In the paper, he raised alarm about a vulnerable, small, open economy such as Iceland suffering from a severe financial and economic crisis from such policies. In the absence of reforms in the “global financial architecture”, Stiglitz outlined a set of regulatory and tax measures that Iceland should implement “both to reduce the likelihood of a crisis and to help manage the economy through a crisis.”

Stiglitz’s paper has invaluable advice that should have been considered by any nation — and especially Iceland — but it appears these recommendations were ignored. The right-wing reformers certainly didn’t change their course. Why would they? Life was good and getting better in the small island state, with showrooms full of fancy cars and booming real estate, business and financial industries.

At first, the policies appeared to be very successful. The economy grew at a strong pace, rising until Iceland achieved one of the highest per capita GDPs in the world. In 2007 it also topped the score for the United Nation’s Human Development Index.

Iceland rocketed to the top 10 in the indexes of economic freedom designed by the Fraser Institute and the Heritage Foundation. It was lauded by the conservative Cato Institute for its flat taxes, privatization and economic freedoms. The institute also criticized Naomi Klein for not mentioning Iceland (along with Ireland, Estonia and Australia) as an example of success in her book about the rise of disaster capitalism, The Shock Doctrine.

Icelandic banks and businesses, with the support of their government, expanded aggressively overseas, particularly into the UK and the Netherlands. The banking industry and private businesses flourished and created a number of new billionaires on the island.

Then it all came crashing down.

Inflation and short-term interest rates escalated to 14 percent, and Iceland’s currency lost half its value. Now Iceland has an external debt equivalent to about $200,000 per person with virtually no prospect of repaying it.

Iceland’s economic collapse wasn’t caused by the subprime crisis or by the Wall Street shenanigans in the biggest economic powerhouse in the world. Instead, it was caused by the same Friedman-inspired economic policies being independently applied in one of the smallest countries in the world.

Back in the United States, it appears that Washington’s experiments with Friedman-inspired economic policies are not meeting with much success. Each action taken by the US Treasury and the Federal Reserve until mid-October was met with a further decline in stock prices.

Stock markets didn’t start to recover until European nations moved to effectively nationalize their major banks. This move was quickly followed by Washington, although it is far outside of what Friedman advocated. It is also diametrically opposed to a number of the 10 economic policy commandments of the old “Washington Consensus”. While stock markets may recover, or continue more along their roller-coaster ride, we have yet to see how far down these Friedmanite free market policies will take the real economy of people’s jobs, incomes and living standards.

What is somewhat incredible is the apparent lack of remorse or self-reflection and doubt being expressed by the ideologues who put these policies in place. Amazingly, many neocons continue to argue that the financial collapse was caused by regulations that were too strong, or by a confluence of unlikely events, including a rise in “leftist attitudes”.

There seems to be a belief among many that a financial market bailout will soon relieve the credit crunch caused by the subprime fiasco and then we can go back to business as usual. We don’t need to look too far back in time or too far abroad to see how misguided these views are. Clearly it is time to broaden our horizons, learn from Keynes and successful New Deal economic policies, and consider other imaginative solutions to our economic crisis.

Toby Sanger is an economist with the Canadian Union of Public Employees and a contributor to the Progressive Economics Forum blog.